Alcohol and the early retirement budget

Alcohol and the early retirement budget

Early retirement and drinking don’t have to be unhappy bedfellows but I’m embarrassed to say that alcohol has historically been one of the biggest expenses in my budget.

In my defense, when you’re aiming for an early retirement it can be difficult to fit everything in a very lean budget. Unlike other expenses, alcohol can be a difficult expenses to properly reign in. Living on 25% of your net income is difficult enough even if you are happy to sit alone in a dark unheated room living on mung beans and oats. Early retirement shouldn’t mean having to be anti-social or passing up opportunities to go to the pub with your friends. It just means you have to be smart about it.

The starting point in this discussion is that if you can go without alcohol then you are at a large advantage. It is an expensive, unhealthy and largely unproductive exercise. The best (although unfun) solution is to simply not drink. If you are already a non-drinker, rejoice! You are one step ahead on the journey to early retirement.

If you enjoy a drink from time to time there are many things you can do to minimize the associated costs.

Beating alcohol into submission

One of the problems with drinking is that once you start, your judgement is significantly impaired. If you’re like me, months of effort and careful planning leading to modest (but significant) savings can be undone in one evening of unplanned drinking. The answer is to be properly prepared, be able to say no, and to prevent the damage once you start.

In my line of work (and in Australia), drinking alcohol is almost compulsory and there are numerous functions on during work hours that everyone is expected to go to. Sometimes, a tab will be provided for most of the night leading to everyone getting truly sloshed – it’s great on the one hand, but it leads to situations where early retirement gets put on the back burner in favor of another COCK SUCKING COWBOY – WHOOOOOOOOO!!!!!!!!!!!!!!

Ways to enjoy alcohol without setting fire to money

  1. If you like drinking at home, find the cheapest drink you like and stick to that.
  2. If you go out drinking, leave the wallet at home and carry only the amount you are willing to spend. Your rational, sober mind will automatically defeat your drunk, hungry mind even as you walk past McDonald’s on the way home.
  3. Organize to drink at home with friends rather than at the pub or a bar. At the bar you pay almost 400% more just so someone else can bring you a drink that is watered-down. Bars are also noisy and full of drunk people who smell and are obnoxious.
  4. Drink less frequently and reward yourself with a tipple only after you reach an early retirement goal.
  5. Include it as a distinct category in your budget and stick to it.
  6. Have an alcohol free month every few months as a test of will power. It’ll save you a bunch!
  7. Read about the negative health consequences of regular drinking – as I mentioned earlier, if you’re able to do without, you’re at a big advantage!
  8. Buy a flask!
  9. At house parties, if you are not wanting to drink any more but don’t want to be pressured into doing so, drink water with ice or from an opaque cup.
  10. Offer yourself to be the designated driver, no one will ever give you grief for not drinking.
  11. Buy a home-brewing kit and brew your own beer, make your own cider or wine.
  12. If you are going out, have a few drinks at home before you go.
  13. Learn to moderate your drinking – having a few drinks is normally more pleasurable than 20 drinks, waking up in a pool of your vomit with an empty wallet in a suburb you’ve never heard of.

If you like drinking, be realistic with your budget

It’s really easy to discover the magical possibility of early retirement and try to reduce spending to an unrealistically low level. For me, I have a target expense level of 25% of my net income which is really hard to reach. My partner and I tend to hover around the 32% mark, which is still great, but not quite where we want to be.

There comes a point where your budget is so optimized that further optimization only provides minimal improvement – this is not to say we shouldn’t try to keep improving, just that we have to be realistic. With alcohol, if you have historically spent $400 per month on the stuff then you’re unlikely to be able to reduce that to $20. Set a realistic level you can keep reaching and strive to make small improvements each month.

I’m a bit fan of tracking progress – try to out-do yourself every month.

If you’re a drinker that wants to stop working forever, stop turning up to work to be yelled at by a manager who doesn’t know your job half as well as you, and stop wasting your productive years in a cubicle then you should try to follow the tips above.

Recognize drinking for what it is. It’s an entirely discretionary, destructive, highly fun, expensive pass time. It’s something that can waste a lot of money very quickly during a period when your judgement it impaired – it’s gets you no where, it doesn’t lead to lasting happiness, is linked to a myriad of health problems. Learn to drink in moderation, in situations where you are in control, and where you won’t be pressured into drinking – and spending – when you don’t want to.

Last drinks and early retirement

I’m not trying to advocate that any particular level of drinking is best. None is great. Lots is hilariously fun. The middle ground is compatible with early retirement if done cleverly. Consider changing your drinking habits so that you minimize the cost of alcohol. Your wallet and liver will be grateful.

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Alcohol and the early retirement budget — 19 Comments

  1. I think that provided you don’t go overboard with excessive drinking and as long as you stay within your budget, you can still enjoy a drink or two.

    I normally have a couple of beers each weekend and then remain sober throughout the week. This means I buy a carton of beer about every 2-3 months.

    • Very sensible way to do it Glen. That tends to be the way I do things too, although at the end of the year the functions in my industry are absolutely constant and unavoidable. They’re expensive, but heaps of fun.

  2. Hi James,
    Thanks for sharing this article. I think that a little (not a liter) of good alcool will give you a great time, but one can have a good time with not alcohol at all.
    Also, careful with cheap alcoholic drinks, they may contain lots of sulfites and what not.
    Here in Europe we can get good wine for a reasonable low price and also beer and champagne to enjoy a good drink without affecting your budget.

  3. Alcohol can be a huge $ suck. I know people who spend thousands and thousands each year on drinking. I drink a bit more now than I used to, but it’s still not that often. I avoid it if I can mainly because of financial considerations.

    • So do I DC. When I do I try to invite people to my place or go to theirs. There is nothing worse in my view, than standing around in a loud bar spending $9 for a drink. Yuck.

  4. This is one reason that I am grateful for not being a big drinker. I just really hate the taste/feeling of alcohol.
    I don’t see anything wrong with it. Beer is the reason that civilization was created in the first place. But with alcoholism in my family tree it’s something that I have avoided.

  5. Alcohol is a big part of my budget too, mostly at home. When going out, I considering an experience of sharing and socializing with friends so I don’t mind the extra expense. It is important to me to have some areas where I don’t think too much about my spending, because I enjoy spending this way.

  6. I’m not a big drinker even though all my mates were big pub drinkers back in the UK. I have a beer or two a week but that’s about it. I save my allowance money to buy my cases of beer and it works for us. If we go out we don’t buy alcoholic drinks as Mrs.CBB does not drink often either. I always like the drink before you go to a party and have a designated driver to save cash. Sounds like a plan to me! Mr.CBB

  7. Homebrewing is the brewing of beer, wine, sake, mead, cider, perry and other beverages through fermentation on a small scale as a hobby for personal consumption, free distribution at social gatherings, amateur brewing competitions or other non-commercial reasons. Both alcoholic and non-alcoholic beverages can be made at home.,”:

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